An anonymous Twitter user with the handle @ALT_USCIS has been critically tweeting about the Trump administration’s immigration ban. This alone would not garner much attention, but the anonymous user purports to be a disaffected employee of the United States Citizenship and Immigration Services, which means (if the anonymous user is being truthful) that a federal employee is publicly criticizing the executive branch that he or she works for. To the Trump administration, this would make the person a “leaker”, but just because a person works for the administration does not mean they have relinquished their First Amendment rights, which protects most speech by federal employees with some limited exceptions.

One of the many common misconceptions that non-lawyers hold is that the First Amendment protects all speech – not so. When you publicly tweet, Instagram, or post something to Facebook or Google+ that offends broad swaths of the public, who in turn boycott your store, contact your employer, or pull advertising from your television show, the First Amendment is not implicated. Why? Because the First Amendment, like the entire Bill of Rights, only protects citizens from government action. So, if you tweet something critical of Trump and the FBI arrests you, then your First Amendment rights have been violated. When your private employer fires you because you tweeted something offensive and stupid, the First Amendment will not save you.

Twitter v. U.S. Department of Homeland Security

Now that we have covered how and when the First Amendment applies, let’s turn back to the anonymous Twitter user who may be a federal employee. The critical tweets drew the ire of Mr. Trump and his administration and the Department of Homeland Security (“DHS”) decided that the best and highest use of your tax dollars was to find and silence the federal employee. To figure out who the employee was, DHS served Twitter with an administrative summons, demanding that Twitter provide DHS with documents to “unmask” the anonymous Tweeter. Can DHS do that? Yes and no. DHS is empowered to issue such a summons, but only related to records dealing with importing merchandise, which was not the case here. So, DHS was acting outside the limited authority it has to issue such a summons – again, your tax dollars at work.

But, it was not just DHS overstepping its authority that was the problem. The summons was also directly implicating the First Amendment, which is supposed to protect citizens, including federal employees, from having their speech silenced by the government. Twitter stepped up and took the fight to DHS, filing a lawsuit to enjoin (stop) DHS from enforcing the summons. Rather than continuing to dig, DHS threw down its shovel and withdrew the summons. Twitter responded by withdrawing the lawsuit.

From the start, the actions of DHS made no sense. First, it had no authority to issue the summons. Second, even if DHS found out who the anonymous user was, what were they going to do? If the Tweeter was fired, demoted, suspended or suffered from any other adverse employment action for tweeting about matters of public concern (immigration), then it would violate the Tweeter’s First Amendment rights and the anonymous Twitter user would have a pretty good lawsuit. The whole charade was an exercise in futility and the protections put in place by the Founders once again served as a bulwark against government intrusion into personal liberties.

Federal Whistleblower Protection Act

Although not at issue in the DHS debacle, federal employees who report illegality, gross mismanagement, wasting money, abuse of authority or public policy violations are protected from agency retaliation. So, if you are employed by a federal agency and you report that you have a reasonable belief that your agency has engaged in misconduct, it is illegal for the agency to threaten to take or to take retaliatory actions against you, such as firing you, suspending you, demoting you, failing to promote you, giving you a poor performance review etc…

Federal False Claims Act (Qui Tam)

Any person or entity, including federal government employees,[1] that know of any person, company, government contractor, medical treatment provider, or anyone else who knowingly presents a false or fraudulent claim for payment (invoice) to the federal government, conspires with others to submit a false or fraudulent claim for payment, or conceals or avoids an obligation to pay the federal government is protected under the False Claims Act 31 U.S.C. §3729 et seq. for reporting such fraud. In other words, if you work for a federal agency and become aware of a government contractor submitting false or fraudulent invoices to your agency, you can (and should) blow the whistle on the fraud. Likewise, if you work for the private company or government contractor and become aware that your employer is billing the federal government for goods or services that it did not provide, is overbilling the federal government or is otherwise submitting false invoices or knowingly be overpaid by the federal government, the False Claims Act will also protect you from speaking out. But, even if you are not a federal employee or are employed by a contractor, vendor, or company doing business with the federal government, if you have first-hand knowledge of fraud against the government, you can bring a claim under the False Claims Act.

The False Claims Act is the most powerful vehicle for whistleblowing because it not only protects the whistleblower from retaliation, it rewards the whistleblower by giving them a percentage of any money recovered by the government. Typically, fraud against the federal government tends to be large, not small, which means whistleblowers can recover many millions. The New York Times profiled a medical doctor who has utilized his knowledge of Medicaid fraud to make millions of dollars.[2]

Unlike the First Amendment and Whistleblower Protection Act, a whistleblower (including federal employee) under the False Claims Act is not only protected, he or she is incentivized to blow the whistle. However, also unlike the First Amendment and Federal Whistleblower Protection Act, blowing the whistle under the False Claims Act requires an attorney because to report the fraud, you must file a complaint in federal court under seal. After the complaint is filed, the Department of Justice will investigate the allegations in the complaint and decide whether it will take over the case. If the DOJ does not take the case, then the whistleblower can prosecute the action with his or her private counsel on behalf of the United States, i.e. qui tam. The whistleblower is known as a relator.

False Claims Act or Qui tam actions carry stiff civil penalties. The United States is entitled to three times the amount of damages sustained by the United States of America, plus a civil penalty of $10,000 for each fraudulent billing submission. What does a relator receive for blowing the whistle? 15 to 25 percent of the proceeds recovered by the United States of America decides to intervene and 25 percent if it does not; plus attorney’s fees and costs. That is a huge incentive, especially if the whistleblower uncovers massive billing fraud.

So, if you see something; say something. Even if you are a federal employee.

If you have any questions or would like to speak to an attorney regarding a claim based on any of the subjects discussed above, contact Klaproth Law PLLC for a free consultation.

Klaproth Law PLLC handles most First Amendment, whistleblower and employment discrimination cases on a contingency fee basis, which means we don’t get paid, unless you recover.

This article is solely for educational and informational purposes and should not be construed as legal advice, nor should it be construed as a substitute for advice of counsel. The article is also written as a broad overview of the law and is not an exhaustive examination of any of the topics addressed. Klaproth Law PLLC recommends that all readers seek specific advice from Klaproth Law PLLC about their particular legal issues.

The Equal Pay Act, 29 U.S.C. § 206, requires that men and women be given equal pay for equal work. The Equal Pay Act was originally enacted to address the disparity in pay between men and women and to protect women against discrimination, but the language of the statute has been read to apply equally to men.

The Equal Pay Act makes exceptions if the pay differential is based upon:

(1) a seniority system;

(2) a merit system;

(3) a system which measures earnings by quantity or quality of production; or

(4) a differential based on any other factor other than sex:

An employer violating the equal pay act cannot lower the wages of any employee to come into compliance.

Unlike Title VII and ADEA claims, the Equal Pay Act applies to most employers (not just those with 15 or 20 or more employees). In fact, it covers all federal, state, and local employees and all employers covered by the minimum wage standards of the Fair Labor Standards Act. The Equal Pay Act exempts certain specific industries from its coverage, including some fishing and agricultural businesses. See 29 U.S.C. § 213.

Title VII claims for gender discrimination or claims under the PHRA, New Jersey LAD, or DC Human Rights Act often accompany claims under the Equal Pay Act. Unlike Title VII, PHRA, LAD and DC Human Rights Act, a claim under the Equal Pay Act does not require prove of intent to discriminate.

There are no administrative requirements to bring a claim under the Equal Pay Act, but you have two years to bring a claim, unless the employer’s violation of the Equal Pay Act was willful (i.e. the employer knew or showed a reckless disregard that its conduct violated the Equal Pay Act), in which case you have three years from the date of the violation to bring a claim.

What do you get for proving a violation of the Equal Pay Act?

A plaintiff is entitled to recover the amount of underpayment as liquidated damages as back pay for two years for non-willful violations and three years for willful violations . A plaintiff is not entitled to compensatory damages in the form of pain and suffering. A successful plaintiff is entitled to reasonable attorney’s fees and costs under the Equal Pay Act. If you prove a willful violation of the Equal Pay Act, the employer may be fined up to $10,000 and may be prosecuted criminally.

Retaliation against employee for reporting violation of Equal Pay Act

It is unlawful for an employer to discriminate against an employee who files a complaint alleging a violation of the Equal Pay Act. Compensatory damages and possibly punitive damages are available for a retaliation claim under the Equal Pay Act.

If you have any questions or would like to speak to an attorney regarding a claim based on any of the subjects discussed above, contact Klaproth Law PLLC for a free consultation.

Klaproth Law PLLC handles most employment discrimination cases on a contingency fee basis, which means we don’t get paid, unless you recover.

This article is solely for educational and informational purposes and should not be construed as legal advice, nor should it be construed as a substitute for advice of counsel. The article is also written as a broad overview of the law and is not an exhaustive examination of any of the topics addressed. Klaproth Law PLLC recommends that all readers seek specific advice from Klaproth Law PLLC about their particular legal issues.

In the first article, we covered discrimination in the workplace due to race, color, gender, religion and national origin. This article will address age discrimination or ageism.

Age Discrimination Under Federal Law

The Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§621-633 makes it unlawful for an employer to refuse to hire; to discharge; or to discriminate against any individual with respect to compensation, terms, conditions, or privileges of employment because of the individual’s age. Age discrimination can also take the form of workplace harassment if the incidents are so frequent or severe to constitute a hostile work environment (see Part I for discussion on hostile work environment). The harasser can be a supervisor, a co-worker, or even a client of your employer.[1]

Like other illegal discrimination, a company policy that applies to everyone, but negatively impacts employees due to age may still be illegal, as long as the policy is unnecessary to the operation of the business. For example, if your employer implements a policy that all workers must be able to type a certain number of words per minute, that policy would likely impact older employees disproportionately because they may not have learned to type and did not grow up using computers. If all of the employees who are impacted by this neutral policy are over 40 years old and are terminated, then the policy may be illegal. But, that would only be the case, if typing was not necessary to operate the business. So, if the policy was implemented at a factory for assembly line workers, it would likely be illegal. If it was implemented at a publishing company, it would most likely be legal.

How old do you have to be to sue under the ADEA? Not very old! 40 years-old is the threshold to bring an ADEA claim. The ADEA only applies to employers with more than 20 employees. To prove an ADEA claim, however, a plaintiff must prove that the younger person who got the job, the raise, the benefits, etc…was “substantially younger”, which courts have found to mean, at least 7 years younger.

Exhaustion of Administrative Remedies

Like other federal employment laws, a plaintiff must first file an ADEA charge with the EEOC within 180 days[2] of the discrimination, before filing a lawsuit. Unlike other federal laws, however, a plaintiff need only wait 60 days after filing with the EEOC before filing a lawsuit.

What do you have to prove? Causation Requirements

The ADEA, unlike Title VII claims, requires “but-for” causation. In other words, a plaintiff must prove that but-for his or her age, the employer would not have taken adverse action, such as firing, demoting, or creating a hostile work environment.

What can you get for an ADEA violation? Damages

A violation of the ADEA entitles a plaintiff to compensatory damages in the form of back pay, reinstatement, front pay (if reinstatement is inappropriate), liquidated damages (for willful violations) calculated by doubling the plaintiff’s award, and attorney’s fees.

What can’t you get for an ADEA violation?

Emotional distress or non-economic damages are not available under the ADEA. Punitive damages are also not available under the ADEA.

State Law Claims for Age Discrimination

The Pennsylvania Human Relations Act

If you are employed in Pennsylvania by an employer, employment agency or labor organization, which employs more than four employees, the Pennsylvania Human Relations Act (“PHRA”) protects you from discrimination based on age.[3] Unlike the ADEA, however, a claim under the PHRA does not give a plaintiff a right to a jury trial. For that reason, PHRA claims are usually brought alongside ADEA claims.

To bring a PHRA claim, a plaintiff must first file with the Pennsylvania Human Relations Commission (“PHRC”). The PHRC has one year to investigate the charge. A plaintiff can only file a lawsuit after the PHRC has dismissed the complaint, but the lawsuit must be filed within two years of the dismissal by the PHRC.

Claims under the PHRA have a lower burden of proof than ADEA claims. A plaintiff may prove discrimination if age was a motivating factor in the adverse employment action.

Why file with the PHRC if the wait is so long?

Damages. A plaintiff can recover unlimited non-economic damages under the PHRA, which are not available under the ADEA.

New Jersey Age Discrimination Claims

Under New Jersey’s Law Against Discrimination (“LAD”), an employee can skip the administrative process and file a suit directly in state court. If a plaintiff wants to combine an LAD age discrimination claim with an ADEA claim, then the plaintiff will still have to file with the EEOC and wait 60 days.

Unlike Pennsylvania and Federal law, New Jersey LAD prohibits age discrimination for both younger and older employees. There is a ceiling for a New Jersey age discrimination claim under the LAD. If you are 70 years or older you cannot bring an age discrimination claim under New Jersey law.

Local Ordinances Prohibit Age Discrimination

Philadelphia’s Fair Practices Ordinance

The City of Philadelphia prohibits any employer, employment agency, or labor organization doing business in Philadelphia from engaging discrimination against employees due to age.

To bring a claim under the Philadelphia Fair Practices Ordinance, you must file a complaint with the Philadelphia Commission on Human Relations within 300 days of the violation. The Commission must investigate the complaint within 30 days and complete its investigation within 100 days. Either party can appeal the Commission’s findings or notice of inaction within 30 days and bring a lawsuit in State or Federal Court.

The Philadelphia Commission on Human Relations will not accept a complaint if the same complaint was filed with the PHRC.

Back pay, compensatory damages and punitive damages (limited to $2,000 per violation) are available under the Philadelphia Fair Practices Ordinance, however, the Ordinance does not expressly provide for a jury trial.

The Washington DC Human Rights Act

The DC Human Rights Act protects employees from age discrimination in the workplace by employers, employment agencies or labor organizations in the District of Columbia, if the employee is 18 years or older.

An employee or job applicant who has suffered discrimination must elect to bring his or her claim to the DC Office of Human Rights within one year of the violation or may file a lawsuit within one year of the violation. If the employee files with the DC Office of Human Rights, the employee will not be able to bring a lawsuit. Instead, a mediation between the parties will be scheduled before any investigation is conducted. The DC Office of Human Rights must complete its investigation within 120 days of the filing of the Complaint. If the Office finds probable cause of a violation, then a hearing is scheduled before three commissioners. The commissioners may order reinstatement, back pay, front pay, compensatory damages and award attorney’s fees and costs. The commissioners’ findings may be appealed to the District of Columbia Court of Appeals.

The same relief available in the administrative hearing is available if a private lawsuit is filed instead.

In the next article, we will look at equal pay in the workplace.

If you have any questions or would like to speak to an attorney regarding a claim based on any of the subjects discussed above, contact Klaproth Law PLLC for a free consultation.

Klaproth Law PLLC handles most employment discrimination cases on a contingency fee basis, which means we don’t get paid, unless you recover.

This article is solely for educational and informational purposes and should not be construed as legal advice, nor should it be construed as a substitute for advice of counsel. The article is also written as a broad overview of the law and is not an exhaustive examination of any of the topics addressed. Klaproth Law PLLC recommends that all readers seek specific advice from Klaproth Law PLLC about their particular legal issues.

Many Americans working for private companies are under the mistaken impression that they cannot be fired without a valid cause or for no reason. In reality, the vast majority of Americans working for private companies are “at-will” employees, which means that they can be fired at any time and for no reason at all. This comes as a surprise to many people who contact lawyers after they have been terminated. It appears as if private businesses prefer that people believe they have some sort of inherent right or contractual protection at work, it makes them less likely to organize or unionize to fight for such rights – a different topic all together.

Now, that we have covered that any American worker who does not work for the government, is not in a union, or has no employment contract can be fired for no reason, the question is whether they can be fired for any reason. The answer to that is no.

Federal, state, and, in some municipalities, local law provide some protection to job applicants or workers who are fired, demoted, not promoted, suspended (with or without pay), or treated differently than other workers for unlawful reasons. What are those unlawful reasons? First, let’s look at discrimination because of (1) Race, (2) Color or Skin Complexion, (3) Gender, (4) Religious Beliefs, (5) or National Origin. Federal law prohibits employers from discriminating against employees on the basis of any one of these categories.

Discrimination Because of Race, Color, Gender, Religion and National Origin

Title VII

Title VII of the Civil Rights Act of 1964 (“Title VII”) is a federal law that prohibits employers with 15 or more employees from discriminating against job applicants or employees because of race, color, religion, sex or national origin.

Does “discrimination” mean that your employer has to fire you? No. Title VII prohibits discrimination in “any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training fringe benefits, and any other term or condition of employment.”[1] Any aspect of employment also includes recruitment or job interviews. If your employer has 15 or more employees and treated you differently in any aspect of your employment because of your race, color, religion, sex or national origin, they have violated federal law.

Title VII also prohibits harassment on the basis race, skin complexion or color, religious beliefs, gender or nationality and sexual harassment. Harassment includes offensive remarks or symbols displayed at work. Sexual harassment includes, unwelcome sexual advances, remarks of a sexual nature, verbal or physical acts of a sexual nature. Isolated incidents or harmless teasing will usually not rise to the level of harassment or sexual harassment, unless the incidents are so frequent or severe that they constitute “a hostile work environment.” The phrase “hostile work environment” is often misused to connote a tyrannical boss or harsh working conditions, however, the phrase only applies in instances of frequent or severe comments or displays of discrimination based on race, skin complexion or color, religious beliefs, gender, or nationality. If your boss, supervisor, or co-workers yell, scream, curse or treat you poorly, but it is not related to any of those categories, it is not unlawful conduct under Title VII.

Company policies that apply to all employees may still be illegal under Title VII if the policy negatively impacts members of certain race, color, religion, gender or national origin, if the policy is not job-related and necessary to the operation of the business. This is designed to prevent a seemingly neutral policy that adversely affects members of one of these protected categories.

Administrative Requirements for Title VII Claim

To bring a claim under Title VII, a claimant must first file a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”) (there is an office in Philadelphia) within 180 days[2] of the discrimination. The EEOC will investigate and make a finding. If the EEOC finds discrimination, it has the authority to file a lawsuit on behalf of the employee, but the EEOC will not file a lawsuit in all cases where it finds discrimination. If the EEOC finds that there is no discrimination, they will issue a “notice of right-to-sue”, which allows the claimant to file a lawsuit in federal court, which must be filed within 90 days of the EEOC’s determination. The EEOC’s determination that there was no discrimination has no bearing on the validity of the lawsuit. The EEOC is an underfunded, overworked government agency without the time or resources to adequately investigate every charge of discrimination, which results in the EEOC often issuing notices of right-to-sue”.

Damages Under Title VII

What are you entitled to if your suit is successful under Title VII? The Court can order that you be reinstated if you were fired and award back pay. If reinstatement is not feasible under the circumstances, the Court may award back pay and front pay in lieu of reinstatement. You may also recover compensatory damages for future loss, emotional distress, pain & suffering, inconvenience, mental anguish & loss of enjoyment of life. If your employer acted with malice or reckless indifference, you may also recover punitive damages to punish the unlawful conduct.

Compensatory damages and punitive damages are capped under Title VII based on the size of your employer. The sum of the amount of compensatory damages awarded under Title VII for future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other non-pecuniary losses, and the amount of punitive damages awarded under Title VII, shall not exceed, for each complaining party:

Up to 100 Employees: $50,000;

101-200 Employees: $100,000;

201-500 Employees: $200,000; and

500+ Employees $300,000

The Court may also award the “prevailing party”, i.e. the winner, his or her attorney’s fees and costs (including expert witness fees).

Race Discrimination Claim under Section 1981

What if your employer is discriminating against because of race but does not have more than 15 employees? You still have a claim. Title 42 U.S.C. §1981 (“Section 1981”) guarantees all persons the right, inter alia, “to make and enforce contracts.” This law prohibits intentional racial discrimination in the workplace.[3] Section 1981 applies to the same type of illegal conduct as Title VII, but does not require that an employee bring a charge of discrimination before the EEOC. In fact, Section 1981 may give a claimant up to four years to file a lawsuit, depending on whether the claim was made possible by the 1991 Amendment to the Civil Rights Act.

Section 1981 does not permit recovery for back or front pay, but permits recovery for compensatory damages and punitive damages without any cap on the recovery.

The court, in its discretion, may allow the prevailing party in a Section 1981 claim to recover a reasonable attorney’s fee (including expert fees), as part of the costs.

State Law Claims –The Pennsylvania Human Relations Act (“PHRA”)

If you are employed in Pennsylvania by an employer, employment agency or labor organization, which employs more than four employees, the PHRA protects you from discrimination based on “race, color, familial status, religious creed, ancestry, age, sex, national origin, handicap or disability, use of guide or support animals because of the blindness, deafness or physical handicap.”[4] Leaving aside the additional protected categories, the PHRA differs from Title VII in two major respects. First, there is no right to a jury trial for a violation of the PHRA, however, if you bring the claim in federal court, the Seventh Amendment provides for a jury trial. Second, unlike Title VII (but similar to Section 1981), the PHRA contains no cap on compensatory or punitive damages.

A claim under the PHRA also requires that a claim be made to the Pennsylvania Human Relations Commission (“PHRC”) within 180 days. A lawsuit must be filed within two years of the PHRC issuing a finding of no probable cause.

PHRA claims can be brought simultaneously with Title VII and Section 1981 claims.

To bring a claim under the Philadelphia Fair Practices Ordinance, you must file a complaint with the Philadelphia Commission on Human Relations within 300 days of the violation. The Commission must investigate the complaint within 30 days and complete its investigation within 100 days. Either party can appeal the Commission’s findings or notice of inaction within 30 days and bring a lawsuit in State or Federal Court.

The Philadelphia Commission on Human Relations will not accept a complaint if the same complaint was filed with the PHRC.

Back pay, compensatory damages and punitive damages (limited to $2,000 per violation) are available under the Philadelphia Fair Practices Ordinance, however, the Ordinance does not expressly provide for a jury trial.

New Jersey Law Against Discrimination (“LAD”)

New Jersey’s law against discrimination prohibits any New Jersey employer (regardless of number of employees) from discriminating because of race, creed, color, national origin, ancestry, age, marital status, affectional or sexual orientation, familial status, disability, nationality, sex, gender identity or because of a handicap.

The LAD does not require that a charge be made to an administrative agency. An employee can file a lawsuit directly in New Jersey’s Superior Court within two years of the violation. Back pay and front pay, Compensatory damages for emotional distress and punitive damages are available under LAD. The prevailing party may also cover reasonable attorney’s fees.

The DC Human Rights Act protects 19 separate classifications from discrimination in the workplace by employers, employment agencies or labor organizations in the District of Columbia, including race, color, religion, national origin, and gender and sexual harassment.

An employee or job applicant who has suffered discrimination must elect to bring his or her claim to the DC Office of Human Rights within one year of the violation or may file a lawsuit within one year of the violation. If the employee files with the DC Office of Human Rights, the employee will not be able to bring a lawsuit. Instead, a mediation between the parties will be scheduled before any investigation is conducted. The DC Office of Human Rights must complete its investigation within 120 days of the filing of the Complaint. If the Office finds probable cause of a violation, then a hearing is scheduled before three commissioners. The commissioners may order reinstatement, back pay, front pay, compensatory damages and award attorney’s fees and costs. The commissioners findings may be appealed to the District of Columbia Court of Appeals.

The same relief available in the administrative hearing is available if a private lawsuit is filed instead.

In the next article, we will look at age discrimination.

If you have any questions or would like to speak to an attorney regarding a claim based on any of the subjects discussed above, contact Klaproth Law PLLC for a free consultation.

Klaproth Law PLLC handles most employment discrimination cases on a contingency fee basis, which means we don’t get paid, unless you recover.

This article is solely for educational and informational purposes and should not be construed as legal advice, nor should it be construed as a substitute for advice of counsel. The article is also written as a broad overview of the law and is not an exhaustive examination of any of the topics addressed. Klaproth Law PLLC recommends that all readers seek specific advice from Klaproth Law PLLC about their particular legal issues.

[2] This time-period is extended in Pennsylvania to 300 days for federal claims, but any state claim under the Pennsylvania Human Relations Act (see infra) must be filed within 180 days. A claim filed with the Pennsylvania Human Relations Commission (state equivalent of EEOC), alleging violations of the Pennsylvania Human Relations Act can be cross-filed with the EEOC to allege the federal law violations.

[3] Unlike Title VII, Section 1981 does not address discrimination for any category other than race.

Many of us have been there, trying to get ahead by padding our resume – very often through unpaid labor, more commonly known as internships. But, is it legal for employers to have free interns? The answer is that it really depends on the internship program.

Sometimes, employers play the semantics game. They believe that if they call their workers “interns” or “independent contractors” or something else altogether, they do not have to treat those workers as employees. The truth is, however, that no matter what an employer calls its workers, the law can view them as “employees”, and entitle them to certain rights, including the payment of wages.

Let’s look at interns. The Fair Labor Standards Act (FLSA), a federal law, says that employees must usually be paid a certain minimum wage and receive overtime pay. Frequently, states require employers to pay their employees even higher minimum wages than required by FLSA.

Interestingly, the Fair Labor Standards Act does not explicitly talk about “interns” at all. In fact, the FLSA defines “employees” very broadly – basically anyone who works for an employer (yes, it’s rather circular). By that definition, even an “intern” would be an employee because an “intern” works for the employer. Yet, the courts have stepped in and said that “trainees” – we use the term “interns” interchangeably – are not employees and are not entitled to same rights as employees. Some employers have used this window to call their employees “interns” and avoid responsibilities under the FLSA. Classic legal loophole.

The fact that courts have said that “trainees” do not need to be treated as employees, however, does not mean that if an employer calls someone an “intern” or a “trainee” that worker no longer has to be paid. In order for a court to find that a worker is an “intern” – who is not entitled to FLSA benefits – a number of important factors must be met.

While courts across the United States do not necessarily agree on what exactly those factors are, one approach has been recently defined in the case of Glatt v. Fox Searchlights Pictures, Inc. In that case, the court found that an intern who worked on the movie Black Swan was, in fact, an employee under the meaning of the Fair Labor Standards Act and New York law, and should have been paid. The court relied on a test adopted by the U.S. Department of Labor in determining whether a worker was an intern who did not need to be paid. According to that test, an individual who works in a “for-profit” private sector internship may do so without compensation if the following elements are met:

The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;

The internship experience is for the benefit of the intern;

The intern does not displace regular employees, but works under close supervision of existing staff;

The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;

The intern is not necessarily entitled to a job at the conclusion of the internship; and

The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Obviously, every case is different and the facts must be considered very carefully in determining whether an individual is an “intern” or an “employee”. In a very general sense, however, it may be insufficient for an employer to say that a worker is an “intern” simply because that “intern” is gaining experience while working for the employer. In such cases, the worker is often an employee who should be paid pursuant to the FLSA and state law.

If you believe that you are entitled to compensation which has not been provided to you because you were treated as an intern, or for another reason, please contact Washington D.C. employee rights lawyer at Klaproth Law.

The Equal Employment Opportunity Commission (EEOC) settled a class action today with Ruby Tuesday. The EEOC had alleged that Ruby Tuesday engaged in a pattern of age discrimination against job applicants who were 40 years of age or older at six of the chain’s Pennsylvania and Ohio in violation of the Age Discrimination in Employment Act of 1967 (ADEA). The restaurant chain also allegedly failed to preserve employment records, including employment applications, as required by the ADEA and EEOC regulations.

“This case demonstrates the agency’s ongoing commitment to challenge discriminatory barriers to hiring,” said EEOC General Counsel David Lopez. “Vigorous law enforcement efforts on behalf of older workers are critical to the EEOC’s mission to eradicate barriers to employment.”

In addition to the $575,000 in monetary relief, the decree resolving the lawsuit prohibits Ruby Tuesday from engaging in future age discrimination or retaliation and provides substantial non-monetary relief at the affected Ruby Tuesday locations. Among other things, Ruby Tuesday, Inc. will:

Implement numerical goals for hiring and recruitment of job applicants age 40 and older at the affected locations;

Review its job advertisements to make certain they do not violate the ADEA’s prohibitions against age discrimination;

Conduct audits, including random reviews of hiring decisions, to ensure non-discrimination and compliance with the terms of the consent decree;

Evaluate the job performance of people with hiring authority for the six stores named in the consent decree and set their compensation (including bonuses), in part, based on their degree of success in helping Ruby Tuesday achieve its goals of ensuring that its recruitment and hiring practices provide equal employment opportunities for people who are 40 or older;

Designate a decree compliance monitor for oversight of compliance with the requirements of the ADEA and the terms of the consent decree;

Provide extensive training on the requirements of the ADEA and the consent decree to the decree compliance monitor, human resources personnel and hiring authorities of the six stores named in the consent decree; and

Report to the EEOC and keep records about its hiring practices and compliance with the consent decree.

Contact Washington, D.C. Employee Rights Lawyers

If you believe that you have been a victim of employment discrimination because of your age, please contact Washington, DC employee rights lawyers at BK Law.

In June 1998, Shirly Ivey (“Ivey”), a District of Columbia employee, started to complain about the way her supervisor, Lennox Douglas (“Douglas”), treated her. Between 1995 and 2000, Ivey had gained weight and from 1997 to 1998, Douglas, made disparaging comments about her weight and appearance. In June of 1998, Ivey approached her superiors to complain of Douglas’ inappropriate comments. No action was taken and Douglas continued his harassment. On July 22, in what appeared to be a retaliatory action, Douglass suspended Ivey from work. Months later, after returning to work, Ivey found her workspace had been moved to an area she described as a storage room. Later, on September 15, Ivey requested a meeting with Douglass and an Equal Employment Opportunity counselor, which was never held. Instead, on September 22, Ivey learned that she was being fired for negligent performance of her work responsibilities and being absent without leave. Ivey appealed to a Disinterested Designee.[1] On October 19, Ivey won an appeal of her termination, and she returned to work on April 29, 1999, after several months of medical leave. After Ivey was informed that her grievances could not be resolved by the Equal Employment Opportunity office, she decided to file suit against the District of Columbia (“District”) in Superior Court for discrimination under Title VII of the Civil Rights Act of 1964 (“Title VII”), the DCHR, and the Americans with Disabilities Act.

The Trial Court granted the District’s motion for summary judgment and on appeal the District of Columbia Court of Appeals reversed and remanded both the Title VII and DCHR claims.

On remand, the Trial Court decided Ivey’s Title VII and DCHR claims, in which the court gave the jury potentially conflicting instructions. The Trial Court instructed the jury that “[t]he plaintiff must prove her damages with reasonable certainty” and “[t]he plaintiff does not have to prove her exact damages.” The jury expressed confusion regarding this seemingly contradictory set of instructions. The jury sent a note to the Court which read, “[i]f we were to have to address the damages questions, we would appreciate some additional guidance. The Court’s instructions tell us that we are not to speculate as to damages. We are of the opinion that the plaintiff’s evidence does not provide us with any evidence that would allow us to make a determination on damages that would not be speculative. What would you advise?” In response the ury’s inquiry about damages, the trial judge simply instructed them to reread their jury instructions. The jury then awarded Ivey $1 in nominal damages. In response to the trial courts jury instructions, Ivey appealed to the District of Columbia Court of Appeals.

On appeal, the Court of Appeals briefly described the law behind a potentially erroneous jury instruction, going so far as to say that the jury in this case may very well have been confused and not understood the instruction. However, the Court of Appeals reasoned that there is no reason to discuss the instruction because Ivey failed to produce (perhaps an oversight) any evidence in the trial record which demonstrates that she had presented the jury with evidence of the damages she suffered. Accordingly, the Court of Appeals held that “any error in the trial court’s failure to reinstruct the jury was harmless.”

[1] “An employee of the District of Columbia, upon receiving a notice of termination, may have the proposed termination reviewed by a ‘Disinterested Designee,’ a third party who, among other qualifications, is not ‘in the supervisory chain of command between the proposing official and the deciding official, nor subordinate to the proposing official,’ and has ‘no direct and personal knowledge (other than hearsay that does not affect impartiality) of the matters contained in the proposed removal action.’” Ivey v. District of Columbia, at Fn 1 (citing D.C. Personnel Regs. § 1612.2).

Small Business Tax Credit

Many small business may qualify for tax credits under the Affordable Care Act. To qualify as an “eligible small employer” you must: have more than 25 full-time equivalent employees (FTE); average annual wages of your employees must not exceed $50,000; and the employer must make an arrangement in which it “[contributes] on behalf of each employee who enrolls in a qualified health plan offered to employees by the employer through an exchange in an amount equal to a uniform percentage (not less than 50 percent) of the premium cost of the qualified health plan.” 26 U.S.C. 45R. If you qualify, your small business may receive a tax credit of up to 35% or 24% for small non-profits. Id. In plain English, if you employ more than 25 individuals in your small business, who earn on average less than $50,000, you may qualify for a tax credit of up to 35%.

Early Retiree Reinsurance Program

The Early Retiree Reinsurance Program provides financial relief to employers so retirees can receive quality health insurance. The program will “provide reimbursement to participating employment-based plans for a portion of the cost of providing health insurance coverage to early retirees (and to the eligible spouses, surviving spouses, and dependents of such retirees)….” 42 U.S.C. 18002. In other words, employer based plans which cover retirees aged 55-64, can now get financial help through the Early Retiree Reinsurance Program.

Affordable Insurance Exchange

Starting in 2014, small businesses with fewer than 100 employees will be eligible to shop for insurance at an Affordable Insurance Exchange. These “exchanges” are “designed to assist qualified employers in the State who are small employers in facilitating the enrollment of their employees in qualified health plans offered in the small group market in the State.” 42 U.S.C 18031. Put simply, small businesses will have the opportunity to shop for health insurance at health insurance exchanges which give small businesses similar health insurance choices as large business in health insurance purchasing.

On January 24, 2008, Kerry Shea Price (“Price”) was terminated from his job with the Washington Metropolitan Area Transit Authority (“WMATA“) for failing to indicate on his application that he had been convicted of a felony. Price v. Washington Metro. Area Transit Auth., 11-CV-0567, 2012 WL 1216121 (D.C. Apr. 12, 2012). After Price was fired, he filed a grievance which was eventually put to a vote with his Union as to whether or not the grievance should be taken to arbitration. Id. On August 6th, 2008, the Union voted not to arbitrate his grievance. Id. On November 7th, 2008, Price filed a pro se (i.e. he represented himself) complaint against WMATA, his Union, and specific Union individuals arguing that WMATA wrongfully terminated him and that the Union arbitrarily refused to take his grievance against WMATA to arbitration. The trial court dismissed the complaint without prejudice. Id. On December 10th, 2009, Price filed an almost identical claim which, on April 10th, 2010, the trial court dismissed the complaint partially because it “f[ell] beyond the applicable six-month statute of limitations.” Id.

In response to the Trial Court’s ruling that Price’s claim lay outside the statute of limitations, Price appealed. Id. Price argued on appeal, that the Trial Court erred by applying the six-month statute of limitations described in the National Labor Relations Act (“NLRA”), instead of applying the District of Columbia’s three-year limitations period for contracts. Id. Specifically, Price argued that the NLRA is not applicable to the WMATA, because the organization is a political subdivision and therefore does not fall within the NLRA’s definition of “employer.” Id.

On appeal, the Court relied on DelCostello v. Int’l Bhd. of Teamsters, 462 U.S. 151 (1983), which stipulates that cases like Price’s “borrow” the definition of employer for the NLRA, and therefore it upheld the trial court’s decision. Id. The court explained that although “’the [WMATA agreement], not the … National Labor Relations Act, governs WMATA’s collective-bargaining relationship with its employees and their representatives’ courts—including this court—have looked to NLRA case law to derive principles applicable to disputes involving the WMATA collective bargaining agreement.” Id.

A new business owner can quickly become overwhelmed with the various administrative, marketing, operational, and customer service tasks that running a business requires. As a business grows, one of a business owner’s first major decisions involves hiring employees. This hiring decision entails several issues, including: whether to hire part time vs. full time, provide compensation based on project vs. hourly, paying hourly vs. paying salary, and whether to hire workers as “employees” or as “independent contractors.”

Hiring staff as “independent contractors” carries many benefits, specifically when it comes to taxes. When hiring employees, employers must provide employees with IRS Form W-2 that reports of all the employee’s wages, the tax withheld by the employer, and the tax paid by the employer on the employee’s behalf (ie. FICA, Medicaid Taxes, Federal Unemployment, and Statement Unemployment). In contrast, for an independent contractor, an employer does not need to pay FICA, Medicaid, or Unemployment for the independent contractor. Instead, the employer pays the independent contractor the gross amount of money earned, issues a 1099 to the employee, and the employee is then responsible to pay his/her own self-employment tax or relevant business tax.

While the tax benefits of hiring an independent contractor are clear to an employer, the employer’s ability to classify a worker as such is much less clear. The Department of Labor and Internal Revenue Service treat the Misclassification of Employees very seriously. The Misclassification of Employees can expose an employer to substantial penalties and fines.

A common law test is used to determine whether a worker is an employee or an independent. The most important factor under the common law to determine the relationship between the employer and the worker is the degree of control the employer has over the worker. Specifically, the degree of control is analyzed through three categories: (1) behavioral control, (2) financial control, and (3) the type of relationship.

Behavioral Control covers facts that show whether the business has a right to direct and control what work is accomplished and how the work is done, through instructions, training, or other means.

Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker’s job. This includes:

The extent to which the worker has unreimbursed business expenses

The extent of the worker’s investment in the facilities or tools used in performing services

The extent to which the worker makes his or her services available to the relevant market

How the business pays the worker, and

The extent to which the worker can realize a profit or incur a loss

Type of Relationship covers facts that show the type of relationship the parties had. This includes:

Written contracts describing the relationship the parties intended to create

Whether the business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation pay, or sick pay

The permanency of the relationship, and

The extent to which services performed by the worker are a key aspect of the regular business of the company

The IRS traditionally looked at the following 20 factors:

Instructions: If the person for whom the services are performed has the right to require compliance with instructions, this indicates employee status.

Training: Worker training (e.g., by requiring attendance at training sessions) indicates that the person for whom services are performed wants the services performed in a particular manner (which indicates employee status).

Integration: Integration of the worker’s services into the business operations of the person for whom services are performed is an indication of employee status.

Services rendered personally: If the services are required to be performed personally, this is an indication that the person for whom services are performed is interested in the methods used to accomplish the work (which indicates employee status).

Hiring, supervision, and paying assistants: If the person for whom services are performed hires, supervises or pays assistants, this generally indicates employee status. However, if the worker hires and supervises others under a contract pursuant to which the worker agrees to provide material and labor and is only responsible for the result, this indicates independent contractor status.

Continuing relationship: A continuing relationship between the worker and the person for whom the services are performed indicates employee status.

Set hours of work: The establishment of set hours for the worker indicates employee status.

Full time required: If the worker must devote substantially full time to the business of the person for whom services are performed, this indicates employee status. An independent contractor is free to work when and for whom he or she chooses.

Doing work on employer’s premises: If the work is performed on the premises of the person for whom the services are performed, this indicates employee status, especially if the work could be done elsewhere.

Order or sequence test: If a worker must perform services in the order or sequence set by the person for whom services are performed, that shows the worker is not free to follow his or her own pattern of work, and indicates employee status.

Oral or written reports: A requirement that the worker submit regular reports indicates employee status.

Payment by the hour, week, or month: Payment by the hour, week, or month generally points to employment status; payment by the job or a commission indicates independent contractor status.

Payment of business and/or traveling expenses. If the person for whom the services are performed pays expenses, this indicates employee status. An employer, to control expenses, generally retains the right to direct the worker.

Furnishing tools and materials: The provision of significant tools and materials to the worker indicates employee status.

Significant investment: Investment in facilities used by the worker indicates independent contractor status.

Realization of profit or loss: A worker who can realize a profit or suffer a loss as a result of the services (in addition to profit or loss ordinarily realized by employees) is generally an independent contractor.

Working for more than one firm at a time: If a worker performs more than de minimis services for multiple firms at the same time, that generally indicates independent contractor status.

Making service available to the general public: If a worker makes his or her services available to the public on a regular and consistent basis, that indicates independent contractor status.

Right to discharge: The right to discharge a worker is a factor indicating that the worker is an employee.

Right to terminate: If a worker has the right to terminate the relationship with the person for whom services are performed at any time he or she wishes without incurring liability, that indicates employee status.

For more information on the proper classification of your workers as employees or independent contractors, employment and tax compliance issues, and other related employment law issues please contact the Washington DC employment lawyers at the business law firm of Basyuk & Klaproth.